Know Your Cost Limitation!!

Posted on Wednesday, April 9th, 2014

Below is a great article that Claire and Gina have written for The Solicitors Group

In a previous article we highlighted the fact that well organised and tidy files can have an impact on how quickly you can receive payment from the Legal Aid Agency.  Another positive of having well organised files is that it would also make it easier for you to keep a check on your work in progress in order to keep within the cost limitation of a public funding certificate.  Costs limitations are calculated on net costs and include your profit costs, disbursements and Counsel Fees (all excluding VAT)

In the event that a cost limitation of a Public Funding Certificate has been exceeded, Counsel is paid first, then disbursements are paid and Solicitors are paid last, therfore Solicitor’s profit costs would be reduced if there is not enough costs scope under a Public Funding Certificate.

Matters that do not fall into the Fixed Fee & FAS Schemes

For example, the cost limitation on a Certificate is £2500.00 Solicitors’ costs are £2950.00 not including VAT broken down as follows:

 

 

Profit Costs

£2,200.00

Disbursements

£500.00

Counsels Fees

£250.00

Total

£2,950.00

Solicitor’s profit costs would be reduced in order to bring the amount you are claiming within the financial limitation of the Certificate, as below:

 

 

Profit Costs

£1,750.00

Disbursements

£500.00

Counsels Fees

£250.00

Total

£2,500.00

Where a cost limitation has been exceeded in a Claim 1 for assessment by the LAA, we at Paramount Legal Costs Ltd, would limit the profit costs on the claim form and would advise you to mention this in your covering letter to the LAA when sending in the claim for payment (or we would note this in our covering letter if we undertake the processing of your work).

Where a cost limitation has been exceeded in a Bill for assessment by the Court, the matter should be costed in full and submitted to the Court for assessment.  The Court may make reductions bringing the Bill within the cost limitation.  If, after assessment, the Bill is still over the limitation, then you would need to reduce your profit costs on the summary page of the Bill.  These figures are then included on the Assessment Certificate (EX80A/B) and you will need to explain to the Court that the profit costs have been reduced in line with the cost limitation of the Certificate.  The LAA will reject a Bill if the cost limitation has been exceeded.

Matters that fall into the Fixed Fee & FAS Schemes

In these cases FAS fees are included within the cost limitation and reducing Claim 1As/Bills becomes a little more complicated.  Solicitor’s profit costs are now broken down into core costs and FAS fees.  When a cost limitation is exceeded in these matters it is still the Solicitor’s costs that are reduced to comply with the cost limitation but it should be the FAS that is reduced first and then the Solicitor’s core costs if necessary.  What needs to be taken into account if it becomes necessary to reduce the Solicitor’s core costs is that they are reduced to below the exceptional threshold (2 x the Fixed Fee for Public Law or 3 x the Fixed Fee for Private Law) then the matter is no longer exceptional and only the Fixed Fee can be claimed.  In these cases you may need to consider whether it would be more favourable to reduce the disbursements to allow the claim to remain exceptional (disbursements would still need to be paid from Solicitor’s costs).

Lastly, don’t forget!

on 17 February 2014 the Legal Aid Agency announced that there will be a single email address ContactCivil@legalaid.gsi.gov.uk Which will replace all the emails listed below

  • legal.queries@legalaidgsi.gov.uk
  • means.queries@legalaid.gsi.gov.uk
  • finance.queries@legalaid.gsi.gov.uk
  • FGF-FAS.queries@legalaid.gsi.gov.uk

This new single email address has been brought in to ensure that your enquiry is delt with by the correct person at the Legal Aid Agency by using a ‘key’ word in the subject title of your email.
Please click here for the guidance from the Legal Aid Agency.

If you have any questions in relation to cost limitations, any costing queries in general or would like to take advantage of our wealth of experience and use our costing and processing services please email either Claire, Suzanne or Gina.

 

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